Tech Brew Ride Home - Tue. 02/27 – Gaming Continues To Be A Bloodbath

Episode Date: February 27, 2024

If you can believe it, MOAR layoffs in gaming. Big layoffs at Sony. We might see Meta’s first AR glasses later this year. The big hack affecting US pharmacies. Hopin enters the Deadpool. And yet another startup takes at swing at the delayed gratification gimmick for social media. Sponsors: Hims.com/ride Links: Sony is laying off 900 PlayStation employees (The Verge) Microsoft’s Mistral AI Investment to Be Examined by EU Watchdog (Bloomberg) Meta aims to reveal and demo Orion, its first true AR glasses, during its fall developer conference (Business Insider) US pharmacy outage triggered by 'Blackcat' ransomware at UnitedHealth unit, sources say (Reuters) Netflix confirms it’s cutting off Apple billing for legacy subscribers (The Verge) Hopin's UK business enters liquidation as it transfers HQ to the US (Sifted) The Supreme Court is about to decide the future of online speech (The Verge) Supreme Court Fears ‘Land Mines’ in Social Media Debate Over Free Speech (Bloomberg) Lapse, the app turning your phone into an old-school camera, snaps up $30M (TechCrunch) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme right home for Tuesday, February 27th, 2024. I'm Brian McCalla today. If you can believe it, more layoffs in gaming, big layoffs at Sony. We might see Meta's first AR glasses later this year. The big hack affecting U.S. pharmacies, hop in, enters the Deadpool,

and yet another startup takes a swing at delayed gratification gimmicks for social media. Here's what you miss today in the world of tech. Another day, another one of these sad announces, Sony plans to lay off around 900 employees, or 8% of its workforce at its Sony PlayStation Division. They're also going to close the London studio for PlayStation in the UK. Sony says these layoffs will impact game makers, insomniac, naughty dog, and gorilla, three of its most successful subsidiaries as well. So, the employment situation in games continues to be a bloodbath, quoting the verge. Several PlayStation studios are affected, with Sony closing its London studio in the UK, which

developed PlayStation VR games. Sony's Fire Sprite Studio, which is also impacted, is the British studio behind PlayStation VR's Horizon Call of the Mountain game. Sony revealed last week that it's working on PSVR2 support for PC. In a separate note, Herman Holst, head of PlayStation Studios. Confirmed US-based studios like Insomniac Games and Naughty Dog are also affected alongside Sony's Gorilla Studio based in the Netherlands. The layoffs come just days after Sony missed a PS5 sales target, which led to Sony's stock price plummeting by $10 billion. While the PS5 Outlook wasn't what Sony was expecting, analysts also pointed toward a near-decade low games margin, suggesting that the cost of making games is eating into Sony's gaming margins. Sony President

Hiroki-Totoki discussed the opportunity to grow PlayStation games on PC earlier this month, too, and it looks like Sony is throwing more resources at its PC and mobile effort, end quote. Well, I mentioned it obliquely yesterday Microsoft investing in Mistral AI. Microsoft has revealed that their investment in Mistral was a mere 15 million euro, but also admitted EU regulators plan to analyze the investment, quoting Bloomberg. Mistrol develops algorithmic models similar to those from OpenAI used for chatbots and other AI services, but Mistral models are shared openly. Microsoft's investments will convert into equity as part of Mistral's next funding round. In artificial intelligence, Microsoft has worked mostly with OpenAI, investing roughly $13 billion in that California startup. That relationship is now under scrutiny

from regulators in the UK and EU. A European Commission spokesperson said Tuesday that regulators will analyze Microsoft's investment into Mistral AI after having received a copy of the agreement. The move could eventually lead to a formal investigation, potentially scuppering Microsoft's plans, end quote. Sources say meta is going to reveal and but not launch, the first version of its AR glasses, codenamed Orion. It's going to do this during its Connect Developer Conference in the fall, quoting Business Insider. The company's first version of what's considered true AR glasses, an internal project referred to as Orion, is poised to be revealed this fall, most likely during Meta's annual Connect conference for third-party developers. The AR team is

also being pushed to have the high-tech glasses demo during Connect, so there's internal pressure to ensure a high level of performance, according to two people familiar with the plans, whose identities business insider has confirmed, but who asked to remain anonymous so they could speak freely. One of the people said that while the AR glasses wouldn't be for sale to the public after the reveal, a handful of employees have already been experimenting with advanced prototypes. A demo of the new product could generate industry excitement around meta's expensive work in high-tech wearables. The AR glasses are a separate product from meta's better-known Rayban smart glasses and Quest headsets. The Orion Project has been in the works for several years

under Meta's Reality Labs Division, which handles AR and virtual reality work at the company, along with artificial intelligence and all Metaverse-related projects. AR glasses overall are a major part of Meta's plans as a wearables and hardware business. The Verge reported that Meta plan to release a version of the new AR glasses to early adopters sometime in 2027 as part of a multi-year roadmap for wearables. So far, Meta's AR glasses are costly to produce, much less sell at retail, end quote. Apparently, hackers have disrupted services at U.S. pharmacies for the past six days now, so that passes the threshold I always talk about, and sources say the Black Cat ransomware gang is behind the outage at United Health's

Technology Unit that is causing this problem. Since Black Cat is notorious for those recent Vegas attacks, I thought this was worth noting, quoting Reuters. The problems began last week after hackers gain access to change health care's information technology systems and has led to disruptions at pharmacies across the United States. Alphabet's cybersecurity unit Mandient is handling the investigation into the breach. The two people said in a statement mandate confirmed it, quote, has been engaged in support of the incident response but declined to comment further. Black Cat is one of the most notorious of the internet's many ransomware gangs, groups of cybercriminals who encrypt data to hold it hostage with the aim of securing massive payouts.

It has previously struck major businesses, including MGM Resorts and Caesar's Entertainment. In December, Black Cat was the subject of a takedown by U.S.-led international law enforcement, which sees several websites used by the group as well as hundreds of digital keys used to decrypt victims' data. The hackers had threatened to retaliate by extorting critical infrastructure providers and hospitals. CISA, the U.S. Cyberwatchdog Agency, and the FBI also did not immediately respond to emails seeking comment. One expert said the news suggested that digital disruptions while important, could not be counted on to knock ransomware groups out for good. It's inevitable that if you have a group that's making millions of bucks, they're going to attempt

to make a comeback, said Brett Callow, a threat analyst at the cybersecurity firm, MSysoft. The allegation that Black Cat was behind the hack at Change Healthcare also raises questions about parent company United Health's previous claim that it had been targeted by a, quote, suspected nation-state-associated cybersecurity threat actor. I am not aware of any links between Black Cat, also known as Alph-Vos, and a nation state, Calo said. As far as I'm aware, they are financially motivated cybercriminals and nothing more, end quote. Netflix has confirmed that it has started removing Apple, iTunes billing for longtime subscribers, and now requires them to pay directly on its website.

Quoting the verge. It's been a good run for anyone who signed up before Netflix stopped accepting subscriptions through Apple's payment system. One person indicated today on X that they'd kept the same streaming services, old $999 price for years. Alas, if you're like that person, you'll now have to join the rest of us and either accept a more than $5 price hike for essentially the same plan you've had for years, or pay $3 less than you have been and let the ads wash over you. Or you could take the time to reflect on your relationship with streaming services, which seem to get pricier all the time. The change is the end of a long saga. Despite Apple adding in-app subscription options to iPhones in 2010. Netflix didn't add them to its iOS app until 2015 because it was

opposed to Apple's 30% cut. In late 2018, Netflix decided it didn't want to pay Apple at all, dropping in-app subscriptions entirely, and it never looked back, end quote. Quick check-in with some pandemic-era high flyers. Hopin, the virtual event startup, once valued at $7.75 billion back in 2021, has entered liquidation for its UK parent company as it moves its HQ to Delaware in the United States. Quoting sifted. When Hopin raised its $400 million Series C at a $5.65 billion valuation, it became Europe's fastest growing startup ever. And the fund didn't stop there. In August 2021, it raised a $450 million Series D at a $7.75 billion valuation, cashing in on a pandemic-fueled interest in virtual events technology as the whole world

sat in lockdown. Its investors were an all-star cast, including Andrews and Horricks. Horowitz, General Catalyst, IVP, CO2, DFJ Growth, North Zone, Salesforce Ventures, Tiger Global, Seedcamp, and Asell. But as one of the company's very first investors, seed camps, Reshma Sohoney told Sifted last year, all that funding was perhaps too much for Hopin's own good. There was a lot of capital that went in, and neither the company nor the market were ready for that. When you get too much, too fast, too quickly, it's a pretty challenging recipe. Sahoni told the Sifted podcast. Last year, the company sold off some of its assets, including its original product, the Hoppin Events Platform to California-based Ring Central for a reported $50 million.

At the same time, its founder Johnny Borfarhat stepped down as CEO, although Hoppin continued to operate several of its remaining assets, including live streaming platform Streamyard, end quote. Meanwhile, Zoom reported Q4 revenue up 2.6% year-over year to $1.15 billion, which was greater than analysts were expecting. enterprise revenue was up 4.9% to $667.3 million, and the company announced a $1.5 billion stock buyback. Zoom's shares jumped more than 10% after hours. I guess the lesson here is that even if we're not all living on Zoom anymore, at least this was a business that had broken through, even without the pandemic's unusual circumstances. Yesterday, there were oral arguments in front of the Supreme Court of the

United States about the so-called net choice laws passed in Texas and Florida regulating social media content. Quoting the verge. The cases Moody v. Net Choice and NetChoice versus Paxton deal with the constitutionality of laws created in Florida and Texas, respectively. Though there are some differences between the two laws, both essentially limit the ability of large online platforms to curate or ban content on their sites, seeking to fight what lawmakers claim are rules that suppress conservative speech. This fight has reached the Supreme Court level, in part because an appeals court in Florida declared that state's version of the law unconstitutional, while a separate appeals court allowed the Texas law to stand creating a legal rift. The law's opponents warned that a ruling for

the states could force social media companies to carry lawful but awful speech like Nazi rhetoric or medical misinformation, which would likely repel a wide swath of users. Rather than offend users, critics argue platforms may choose. to block whole categories of discussion around topics like race to avoid legal blowback. It's not just big social media platforms that are concerned about the effects of the laws. The nonprofit that runs Wikipedia and individual Reddit moderators have worried that they might need to fundamentally change how they operate or face new legal threats. More traditional publishers have warned that a ruling in the state's favor could

undercut their First Amendment rights as well. But even some opponents of the laws fear that a broad ruling for net choice could hobble any future attempts to regulate a powerful industry. These cases are about the future of public discourse online, says Scott Wilkins, senior counsel at the Knight First Amendment Institute at Columbia University, and the extent to which that public discourse serves democracy, end quote. Indeed, meta, TikTok, and even acts join forces to argue against the laws. How did that go? Well, justices seemed reluctant to strike down the two-state social media laws,

but raised concerns about companies' First Amendment rights. Quoting Bloomberg, the U.S. Supreme Court struggled to find a middle ground on the application of free speech principles to the internet as the justices reviewed Republican-backed laws that would sharply restrict the editorial discretion of the largest social media companies. Hearing arguments for almost four hours Monday in Washington, members from across the court's ideological spectrum suggested reluctance to completely strike down new laws in Texas and Florida, as trade groups representing meta, Facebook, and alphabet are seeking. But a majority of justices also expressed concern about how the law's core provisions would apply to decisions to take down

hate speech and misinformation and block users who don't comply with the platform's terms of service. Those competing instincts left the court as a whole unsure how to handle cases that Justice Amy Coney-Barritt said had, quote, a bunch of landmines that might have unforeseen implications down the road. The court, which is likely to issue an opinion by June, could stop short of deciding the fate of the laws by sending them back to the lower courts. Both laws are currently on hold. Companies say the laws would impose onerous requirements and put sites at risk of being overrun by spam and bullying. Supporters of the laws, including Florida Governor Ron DeSantis and Texas Governor Greg Abbott, say they are needed to prevent discrimination against conservative voices.

The laws were enacted in part as a response to decisions by some platforms to oust former President Donald Trump after the January 6, 2021 Capitol attack, end quote. Finally today, an interesting raise, I feel like somebody takes a run at doing something like this every few years. LAPS is a photo app that makes users wait to share unedited pictures as they are, quote, developed, sort of like old school film. They've raised a $30 million series A, sources say at a $150 million valuation, quoting TechCrunch. It can cost a fortune in 2024 to find an analog camera, buy film and maybe special batteries for it, and take pictures that then need to be paid to be developed. Yet the experience had a charm and a simplicity to it.

For those longing for those old days, a startup called LAPS has been giving smartphone users an alternative. You take pictures that you have to wait to see developed with no chance of editing and retaking before sharing them with a select group of friends if you choose. LAPS has been gaining some traction in the market, claiming millions of users, 100 million photos captured each month, and a coveted, consistent top 10 ranking in the U.S. App Store for Photographic Apps. Now it's announcing a new round of funding of $30 million to take its ambitions to the next level. Graylock, the storied consumer app investor that was an early backer of Facebook, Instagram, TikTok, and LinkedIn, co-led the round with the equally iconic DST global partners.

Previous backers, GV, Octopus Ventures, and Speed Invest also participated, following on from a previous $12.4 million raised in seed and pre-seed funding back in 2021. This brings the total to just over $42 million and a valuation of around $150 million, according to sources. Lapsis plans include more behind-the-scenes treatment of the unedited photos, adding more features around the photo experience, and an eventual move into video. the line there may even be some monetization. CEO and co-founder Dan Silverton said in an interview, although that's not something it's touched yet. It's looking to get away from the usual route that social apps take by leaning into advertising. The feeling and early hypothesis is to not do that,

he said, end quote. LAPS did get some criticism, I should note, for growth hacks that essentially forced you to invite five of your friends before you could even start using the app. Not sure how they got anyone to do that, but I guess it worked. I believe I forgot to mention last week that It was the 10th anniversary of me releasing my first ever podcast episode, the first episode of the internet history podcast. So I've officially been a podcaster for a decade now. In a couple of weeks, it'll be the sixth anniversary of this show, so I've been a professional podcaster for six years. Hopefully I'll remember to mark that one. March 5th, I believe. Somebody remind me.

Talk to you tomorrow.